G.O.P. Medicare Bill Hits New York Hospitals the Hardest

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G.O.P. Medicare Bill Hits New York Hospitals the Hardest

By Richard Perez-Peca, the New York Timas

October 9, 2003

The debate in Congress on adding drug coverage to Medicare has largely obscured a parallel fight over whether the bill should cut or add billions of dollars in Medicare payments to hospitals, particularly teaching hospitals. New York has far more money at stake in that struggle than any other state.

Depending on how various House and Senate proposals are resolved, hospitals nationwide could see a net loss of up to $5.4 billion in Medicare payments over 10 years, compared with 2002 levels, $2.1 billion of that in New York , according to an analysis by the Healthcare Association of New York State, a hospital lobbying group. Part of that reduction would come from a cut of roughly 15 percent in payments made only to teaching hospitals, which are most heavily concentrated in New York .

Some Republican lawmakers called those figures exaggerated, but they agreed that the numbers are in the billions and that New York stands to lose the most.

The fight has pitted legislators from rural areas, whose hospitals would be helped most by the proposed changes, against urban colleagues whose hospitals stand to take the biggest cuts. And it has put several Republican congressmen from New York and a few from other Northeast states at odds with their House leaders, with some saying they might be forced to vote against the bill, drug benefit and all. The House passed its version of the bill in June by a single vote, along party lines, so defection by a cadre of Republicans could threaten final passage.

"We genuinely want to get a bill, but we have to make sure New York is protected," and so far, there have been so such assurances, said Representative Peter T. King, a Republican of Nassau County. Mr. King is one of the Republicans who said he might vote against a House bill that he called "a real, serious blow to New York " in its present form.

The Medicare bill that the Senate passed in June, with bipartisan support, makes fewer cuts to hospitals than the House version, and Senate leaders in both parties have expressed an interest in making the final bill still more generous to hospitals. The issue has gone to a joint conference committee, but its fate remains in doubt, as the two houses still have major differences in their treatment of drug benefits, patient co-payments, hospital payments, states' own drug subsidy programs, competition between Medicare and private health plans and many other issues.

Representative Thomas M. Reynolds, an influential Republican who represents seven western New York counties, is among those trying to nudge some of the House's position in the Senate's direction, by "trying educate people who are either conferees or are in a position to have opinions to conferees."

"I go on the assumption that we'll have to pass it with Republican votes," without Democrats, Mr. Reynolds said. "I'm an optimistic guy to believe that we can get there, but this will be the most difficult bill since I've been here."

The Northeast is not well represented on the 17-member conference committee, a fact that hospital officials and some representatives from that region say worries them. The only New Yorker on the panel is Representative Charles B. Rangel of Manhattan , who, as a member of the Democratic minority, has little sway in a House marked by a sharp partisan divide. The only other member from the Northeast is Representative Nancy L. Johnson, a Republican of Connecticut.

This is partly the revival of an old fight, over the Balanced Budget Act of 1996. Medicare has long paid more to teaching hospitals than it pays to other hospitals for treating the same patients with the same ailments. The balanced budget law sought to shrink that added payment, in a series of steps over several years.

On Oct. 1, 2002 , the differential dropped from 6.5 percent to 6 percent, and under the budget law, it dropped to 5.5 percent this Oct. 1, though officials say the latter decline is effectively postponed, pending the passage of a bill. The House version of the Medicare bill, and House Republican leaders, want to adhere to the balanced budget law and go ahead with the reduction to 5.5 percent.